Budget 2020 Expectations: 'It will pave a way for 5 trillion dollar economy by 2025'
Budget 2020 is expected to be growth oriented maintaining a balance between consumption, investment and fiscal deficit said Prof. J.D. Agarwal, eminent economist, Professor of Finance and Chairman, Indian Institute of Finance. It is likely to give boost to investment maintaining sustainable fiscal deficit between 3.34 to 3.54% and revenue deficit of 2.41 percent.
Budget 2020-21 will show buoyancy in revenue realisation and propose to make heavy investment in infrastructure, agriculture, rural development, education and health sectors said Dr. Agarwal.
The budget is likely to be such that it will pave a way for 5 trillion dollar economy by 2025 with a focus on social justice by taking care of poor and needy.
According to him, the total budgeted amount may be around Rs. 42,92,000 crores with total expenditure of the same amount to achieve a GDP of 235 lakh crores in year 2020-21.
The government’s spending and investment will help revive the industry from its sluggish industrial growth rate of 0.6% in 2019-20 to about 5% in 2020-2021 which would help generate employment, feels Dr. Agarwal
The investment in infrastructure and enhanced allocations in different sectors would help revive industrial production and generate employment to raise formal employment in the economy to 11%. It is likely to create more than 3 crore jobs in 2020-21 opined Dr. Agarwal. Enhanced industrial production and good agricultural production would also help contain inflation to a reasonable level.
Prof. Agarwal expects that there would be buoyancy in both tax revenues and non tax revenues. Government policies particularly digitalisation and simplification and rationalisation of tax structure including GST would result into better tax collections of both direct and indirect taxes. Finance Minister is likely to give relief to in personal taxation by raising the minimum exemption limit by Rs. 1 to 1.5 lakh, and introducing some changes in tax slabs.
To give boost to make in India and protection to Indian Industry Finance Minister may also rationalise import and export duties.
Finance Minister in my opinion is likely to give something to everyone particularly people engaged in farm sector so as to double their income in next few years said Dr. Agarwal.
According to Dr. Agarwal, the policies pursued by the NDA Government in past 5 years and strong economic fundamentals, massive foreign exchange reserves of 460 billion dollars and the present level of current account deficit would help the finance minister in meeting the economic challenges of the economy to put on growth path in the wake of global slowdown.
(Writer is Professor of Finance and Chairman, Indian Institute of Finance)
